Community Banc Mortgage Corporation v. North Salem State Bank
Filing
25
OPINION entered by Judge Sue E. Myerscough on 11/10/2015. Plaintiff's Motion to strike Answer and Amended Affirmative Defenses, d/e 23 is DENIED. The Court construes Defendant's Response, d/e 24 as a request for leave to file the Amended Answer and Grants that request. Defendant is granted leave to file the Answer and Amended Affirmative Defenses filed on October 1, 2015. (MAS, ilcd)
E-FILED
Thursday, 12 November, 2015 09:09:58 AM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
COMMUNITY BANC MORTGAGE
CORPORATION, an Illinois
Corporation,
Plaintiff,
v.
NORTH SALEM STATE BANK,
an Indiana banking corporation,
Defendant.
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No. 15-3051
OPINION
SUE E. MYERSCOUGH, U.S. District Judge.
This cause is before the Court on Plaintiff Community Banc
Mortgage Corporation’s Motion to Strike Answer and Amended
Affirmative Defenses (d/e 23). Plaintiff’s Motion is DENIED.
Because it would only serve to further delay the case should
the Court require Defendant to seek leave, the Court will construe
Defendant’s response to the motion to strike as a request for leave
and grant Defendant leave to file the Answer and Amended
Affirmative Defenses. In addition, the Court will not re-strike
Affirmative Defenses Nos. 2 and 8 because those defenses remain
struck, as identified in the Answer and Amended Affirmative
Defenses.
I. BACKGROUND
On January 16, 2015, Plaintiff Community Banc Mortgage
Corporation filed a Complaint against Defendant North Salem
State Bank in the Circuit Court for the Seventh Judicial Circuit,
Sangamon County, Illinois. On February 19, 2015, Defendant filed
a Notice of Removal, and the case was removed to this Court. The
Complaint alleges that Defendant breached the parties’ Secondary
Mortgage Market Agreement.
In March 2015, Defendant filed a Motion to Dismiss asserting
that the Complaint was barred by the statute of limitations. See
Mot. (d/e 10). In May 2015, this Court denied Defendant’s Motion
to Dismiss. Opinion (d/e 14). Thereafter, Defendant filed an
Answer and Affirmative Defenses (d/e 15).
In June 2015, Plaintiff moved to strike several of Defendant’s
affirmative defenses (d/e 17). In July 2015, the Court struck
Affirmative Defense Nos. 1 (res judicata), 2 (statute of limitations),
and 8 (failure to state a claim) without prejudice. Opinion (d/e 20).
The Court did not specifically grant Defendant leave to amend.
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On October 1, 2015, Defendant filed an Answer and Amended
Affirmative Defenses (Amended Answer) (d/e 22). The Amended
Answer is identical to the original Answer with the exception that
(1) Affirmative Defense No. 1 (res judicata) was amended to include
additional factual allegations and (2) Defendant included
Affirmative Defense Nos. 2 (statute of limitations) and 8 (failure to
state a claim) with a footnote indicating that the Court struck both
defenses without prejudice in its July Order and that Defendant
reserved the right to request leave to amend Affirmative Defense
Nos. 2 and 8. See Amended Answer (d/e 22).
On October 19, 2015, Plaintiff filed the Motion to Strike
Answer and Amended Affirmative Defenses at issue herein.
II. ANALYSIS
Plaintiff requests that this Court strike the Answer and
Amended Affirmative Defenses filed by Defendant or, alternatively,
strike Affirmative Defense Nos. 2 and 8.
Plaintiff first argues that Defendant filed the Answer and
Amended Affirmative Defenses without leave of court and beyond
the time permissible to file an amended pleading without leave of
Page 3 of 9
court. Defendant responds that this Court impliedly granted
Defendant leave to file an Amended Answer.
Federal Rule of Civil Procedure 15 provides the circumstances
under which a party may amend its pleadings. A party may
amend its pleading once as a matter of course within:
(A) 21 days after serving it, or
(B) if the pleading is one to which a responsive pleading
is required, 21 days after service of a responsive
pleading or 21 days after service of a motion under Rule
12(b), (e), or (f), whichever is earlier.
Fed. R. Civ. P. 15(a)(1). In all other cases, a party may amend its
pleading only with the opposing party’s written consent or with
leave of court. Fed. R. Civ. P. 15(a)(2). Leave of court should be
freely given when justice so requires. Id.
In this case, Defendant filed its original Answer on June 8,
2015. Under Rule 15(a)(1)(A), Defendant could have filed, without
seeking leave of court, an amended Answer within 21 days but did
not. Under Rule 15(a)(1)(B), Defendant could have filed, without
seeking leave of court, an amended Answer within 21 days of
Plaintiff’s Motion to Strike Affirmative Defenses (d/e 17), which
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was brought pursuant to Rule 12(f) and filed on June 18, 2015.
Again, Defendant did not do so.
Because Defendant did not file the Amended Answer within
the time period allotted for doing so “as a matter of course” (Fed. R.
Civ. P. 15(a)), Defendant could only file the Amended Answer with
the written consent of Plaintiff or with leave of this Court.
Defendant argues this Court “impliedly” granted leave in its July
23, 2015 Opinion striking Affirmative Defense Nos. 1, 2, and 8
without prejudice. Def. Resp. at 3 (d/e 24). Defendant argues that
it is this Court’s practice to grant leave by dismissing the defenses
“without prejudice.” Id. (citing cases). Defendant also argues that
requiring a motion for leave would not be an efficient use of the
Court’s resources. Id.
The cases cited by Defendant are distinguishable. In each of
those cases, the Court explicitly granted leave to amend or refile.
See Acuity Optical Labs, Inc. v. Davis Vision, Inc., No. 14-3231,
2014 WL 5900994, at *2, *8 (C.D. Ill. Nov. 13, 2014) (wherein the
respondent specifically requested leave to amend any defenses the
Court struck, and the Court set a deadline for respondent to
amend any affirmative defenses); Gregory v. Kirby, No. 12-cv-3249,
Page 5 of 9
2012 WL 5286967, at *3 (C.D. Ill. Oct. 23, 2012) (specifically
granting leave to file an amended complaint); Simplex, Inc. v.
Global Source One Int’l Inc., No. 12-3101, 2012 WL 3647125, at *4
(C.D. Ill. Aug. 23, 2012) (specifically granting the plaintiff leave to
re-file).
In this case, while the Court struck certain defenses without
prejudice, the Court did not grant leave to refile. Therefore, even if
it were the Court’s common practice to grant leave when
dismissing a pleading or affirmative defense without prejudice, the
Court did not do so here.
Moreover, Defendant did not even ask in its response to
Plaintiff’s first motion to strike that the Court grant leave to amend
any affirmative defenses the Court strikes. See Def. Resp. (d/e 19).
In addition, Defendant waited over two months after the Court’s
Opinion to file the Amended Answer.
The Court agrees, however, that at this point, it would not be
judicially efficient to require Defendant to file a motion for leave.
The Court will construe Defendant’s response to the motion to
strike as a motion for leave to file the Amended Answer and grant
that motion. Leave to amend should be freely given. Fed. R. Civ.
Page 6 of 9
P. 15(a)(2). Moreover, Plaintiff will not be prejudiced by the filing of
the Amended Answer, and the Court does not find Defendant has
acted in bad faith or that granting leave will cause undue delay.
See Crest Hill Land Dev., LLC v. City of Joliet, 396 F.3d 801, 804
(7th Cir. 2005) (leave to amend should be freely given but may be
denied “for reasons including undue delay, the movant’s bad faith,
and undue prejudice to the opposing party”).
Plaintiff requests, as an alternative to striking the Amended
Answer, that the Court strike Affirmative Defense Nos. 2 and 8
because the Court previously struck those defenses and Defendant
did not amend the allegations contained therein.
Defendant asserts that striking the defenses is unnecessary
because the Amended Answer makes clear that Affirmative Defense
Nos. 2 and 8 were previously struck by the court but that
Defendant was reserving the right to later request leave to amend
them. Def. Resp. at 4 (d/e 24). Defendant states that it is not reasserting the defenses that the July 2015 Opinion already struck.
Id.
Pursuant to Rule 12(f) of the Rules of Civil Procedure, the
Court may strike from a pleading “an insufficient defense or any
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redundant, immaterial, impertinent, or scandalous matter.” Fed.
R. Civ. P. 12(f). Motions to strike are generally disfavored,
however, because such motions often only delay the proceedings.
See Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286,
1294 (7th Cir. 1989). Nonetheless, if a motion to strike removes
unnecessary clutter from the case, then the motion serves to
expedite, not delay, the proceedings. Id.
The Motion to Strike is denied. The Amended Answer
indicates that the Court struck Affirmative Defense Nos. 2 and 8 in
the July 23, 2015 Order. Therefore, there is no need for the Court
to again strike those affirmative defenses as they are no longer a
part of this case.
III. CONCLUSION
For the reasons stated, Plaintiff’s Motion to Strike Answer
and Amended Affirmative Defenses [23] is DENIED. The Court
construes Defendant’s Response [24] as a request for leave to file
the Amended Answer and GRANTS that request. Defendant is
granted leave to file the Answer and Amended Affirmative Defenses
filed on October 1, 2015.
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ENTER: November 10, 2015
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
UNITED STATES DISTRICT JUDGE
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